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Healthcare Rehabilitation Provider Pays $4 Million to Settle False Claims Act Allegations

Encore Rehabilitation Services LLC, a contract therapy company based in Farmington Hills, Michigan, agreed to pay $4.03 million to settle False Claims Act allegations that the company knowingly provided unnecessary Medicare services to patients in three Michigan facilities. The settlement resolves allegations that Encore provided unreasonable, unnecessary, or unskilled rehabilitation therapy and recorded individual therapy when providing lower-cost group therapy at three different nursing facilities between 2012 and 2018.

Under the False Claims Act, whistleblowers can be rewarded for confidentially reporting fraud that results in a financial loss to the federal government. This settlement resolves previous allegations in three separate lawsuits filed under the qui tam provisions of the False Claims Act by whistleblowers Linda Anderson, Reza Saffarian and Audrey Theile, and Adam LaFerriere who had all worked at Encore.

“The resolution announced today demonstrates my office’s commitment to aggressively pursuing providers who utilize fraudulent practices to put their financial self-interest over a duty to patients knowingly,” said U.S. Attorney Andrew Byerly Birge for the Western District of Michigan.  “It is imperative that providers make healthcare decisions based upon a patient’s need for services rather than a self-serving desire to maximize financial profits.”

Simultaneously, Encore entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health & Human Services, including the implementation of a risk assessment and internal review process designed to identify and address the evolving compliance risks. This five-year agreement requires training, auditing, and monitoring to discuss the company’s issue in conduct related to the case.

“The submission of claims for unreasonable, unnecessary, or unskilled rehabilitative services is improper and unacceptable,” said Special Agent in Charge Lamont Pugh III, HHS-OIG – Chicago Region.  “The public expects that proper services will be provided and those taxpayer dollars will not be wasted.  OIG Corporate Integrity Agreements help to ensure that contracted providers, who have caused improper billing practices change their behavior.”

© 2020 by Tycko & Zavareei LLPNational Law Review, Volume X, Number 120
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About this Author

Jonathan K. Tycko, Civil Litigation Attorney, Tycko Zavareei Law firm
Partner

Mr. Tycko has represented clients in numerous qui tam whistleblowing cases, in areas including Medicare fraud, government contracts fraud, and tax fraud. In addition, with the 2010 passage of the Dodd-Frank Act, Mr. Tycko’s practice has expanded into representation of whistleblowers in the areas of securities and commodities, and violations of the Foreign Corrupt Practices Act.

Mr. Tycko focuses his practice on civil litigation, with special concentrations in whistleblower cases, consumer class actions, unfair competition litigation, employment litigation and housing litigation. He...

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